Gannett Fleming, Inc. v. Corman Const.
220 A.3d 411
Md. Ct. Spec. App.2019Background
- Gannett Fleming (engineer) and Corman Construction (design-builder) entered a 2011 Teaming Agreement for pre-bid quantity/pricing estimates; the Teaming Agreement contained no arbitration clause and limited pre-bid liability to any NCDOT stipend.
- After Corman won the contract, the parties executed a 2012 Design Subcontract governed by Maryland law that (a) incorporated post-award duties, (b) included an expansive dispute-resolution clause requiring mediation then arbitration under AAA Construction Industry Rules, and (c) made Gannett Fleming liable for delays caused by its negligent acts.
- Corman alleged Gannett Fleming’s pre-bid estimates were faulty, causing delays and extra costs; the parties signed a tolling agreement and attempted mediation, which failed.
- On August 15, 2017, after the tolling agreement expired, Corman demanded arbitration; Gannett Fleming petitioned the circuit court to stay arbitration, arguing waiver/untimeliness under Maryland’s 3-year statute of limitations and that the claim arose under the non‑arbitrable Teaming Agreement.
- The circuit court denied the stay; the Court of Special Appeals affirmed, holding (1) the general statute of limitations does not bar a demand for arbitration absent a contractual or statutory provision to that effect and (2) the dispute at least arguably falls within the broad arbitration clause of the Design Subcontract so arbitrability is for the arbitrator.
Issues
| Issue | Gannett Fleming's Argument | Corman's Argument | Held |
|---|---|---|---|
| Whether Corman’s arbitration demand was time‑barred by Maryland’s 3‑year statute of limitations (CJP § 5‑101) | Demand untimely because substantive claims would be time‑barred in court, so arbitration is waived | § 5‑101 applies only to "civil action[s] at law"; arbitration is not an action; absent a contractual time limit or clear waiver, demand is timely | Statute of limitations does not, by itself, bar arbitration; demand not untimely and no waiver shown absent contractual deadline or conduct evidencing intentional relinquishment |
| Whether the dispute is within the substantive scope of the Design Subcontract’s arbitration clause | Claim arises from the Teaming Agreement (pre‑bid work) which contains no arbitration clause, so dispute is non‑arbitrable | The design subcontract’s clause covers disputes that "arise out of or relate to" the agreement; pre‑bid estimates were integral to performance under the subcontract | Arbitration clause is broad and reasonably susceptible to covering the dispute; substantive arbitrability is at least debatable and therefore should be decided by the arbitrator |
Key Cases Cited
- Gold Coast Mall, Inc. v. Larmar Corp., 298 Md. 96 (1983) (scope‑of‑arbitration framework and presumption favoring arbitration when clause is ambiguous)
- Allstate Ins. Co. v. Stinebaugh, 374 Md. 631 (2003) (courts decide clear scope questions; broad clauses construed in favor of arbitration)
- Stauffer Constr. Co. v. Bd. of Ed. of Montgomery County, 54 Md. App. 658 (1983) (trial courts’ limited inquiry: does an agreement to arbitrate the dispute exist; waiver analysis)
- Cain v. Midland Funding, LLC, 452 Md. 141 (2017) (definition of waiver as intentional relinquishment; fact‑intensive waiver inquiry)
- Griggs v. Evans, 205 Md. App. 64 (2012) ("significant relationship" test for related‑contract disputes; discussed but Court favored Gold Coast framework)
- Rosecroft Trotting & Pacing Ass’n v. Electronic Race Patrol, Inc., 69 Md. App. 405 (1986) (distinguishes timeliness of arbitration demand from timeliness of substantive claim)
- Warrior & Gulf Navigation Co., 363 U.S. 574 (1960) (Supreme Court principle that doubts about arbitrability should be resolved in favor of arbitration)
